3/7 Thursday Trading Plan

Trading Plan for Thursday

Market Sentiment: Neutral

Weekly Volatility Risk: High

Supports to Watch:

• Immediate Supports: 5100, 5093 (major), 5087, 5082-79 (major), 5078, 5070-73, 5058-60, 5052, 5045 (major), 5033-36 (major), 5028, 5018-20 (major), 5013, 5008 (major), 4998 (major), 4988, 4978, 4969, 4965-63 (major).

Resistances to Monitor:

• Key Resistances: 5108 (major), 5112, 5121 (major), 5126, 5130-33 (major), 5140 (major), 5146, 5154, 5163, 5171 (major), 5182 (major), 5195, 5203-5206 (major), 5216, 5223, 5228 (major), 5235, 5240 (major), 5247, 5258-61 (major).

Trading Strategy:

• Range-Bound Market: Trade with caution within the newly established range between 5093 and 5130-33. Exercise discipline and focus on key levels for potential trades.

• Long Opportunities: Look for potential long entries at 5108 (if back-tested), 5093, or on a failed breakdown of today's lows (5099-5100). If 5093 fails, aim for longs only at major supports; consider a failed breakdown of yesterday's low (5063) as a possible trade setup.

• Short Opportunities: Selling opportunities may emerge at the 5130 level if resistance holds. As always, avoid shorting green candles.

Bull Case:

• Short-Term Focus: Bulls maintain control on higher timeframes. Failure of 5033-36 would signal the first step towards a trend shift. Focus on the immediate term; holding above 5093 allows for a base-building pattern between 5093 and 5130, with upside targets of 5140, 5146, and ultimately 5180.

Bear Case:

• Breakdown Signals: Loss of 5093 raises caution, particularly if the 5079-83 support fails, triggering a deeper selloff. Exercise caution with breakdown trades and wait for clear signals.

In Summary: The trend remains bullish, but increased volatility warrants a cautious approach. Pay close attention to the 5093 and 5130-33 levels. A breach of 5093 opens up opportunities for deeper retracements.

News: Top Stories for March 7, 2024

• Stock Market Rally Continues: The S&P 500 saw a strong February with a 5.34% gain and maintains a YTD total return of 7.11%. Investor confidence in the Federal Reserve's potential for a soft landing remains high. Recent earnings reports continue to surpass expectations.

• Federal Reserve Policy Shifts: Strong economic data may lead the Fed to postpone interest rate cuts previously expected to begin in March. Although Fed Chair Jerome Powell suggests the Fed's policy rate is likely at its peak, potential rate cuts may only materialize later this year.

• Economic Outlook:

  • While FOMC officials are not anticipating a recession, they project a significant slowdown in the U.S GDP growth in 2024.

  • The technology sector, with a particular emphasis on AI companies like Nvidia, continues to demonstrate robust earnings growth.

• Global Market Developments:

  • China reduces a key interest rate to stimulate its property sector.

  • Asian markets show mixed performance, with Japan's Nikkei reaching notable highs.

• Corporate and Banking Highlights:

  • New York Community Bank receives a $1 billion investment from entities including former Treasury Secretary Steven Mnuchin's company.

  • Lufthansa reinstates dividends on the back of increased profits.

  • WuXi Companies' shares experience a decline amidst renewed U.S. sanction concerns.

• Cryptocurrency Trends: Bitcoin's price surge is linked to its limited supply.

• Regulatory Updates: The SEC approves a revised climate disclosure rule, easing requirements for companies to report certain emissions.

• Investing Insights: Analysts from JPMorgan, Fidelity, and Morningstar offer perspectives on economic growth, inflation, corporate profits, and stock market valuations, emphasizing that despite potential economic slowdown, opportunities exist for investors across various asset classes.

• Other Major Developments:

  • RBI takes action against Paytm Payments Bank in India.

  • AstraZeneca announces a £200 million expansion investment in Cambridge, UK.